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Geron Is Shutting Down Its Stem Cell Clinical Trial

The company conducting the world’s first clinical trial of a therapy using human embryonic stem cells said on Monday that it was halting that trial and leaving the stem cell business entirely.

The company, Geron, said that its move did not reflect a lack of promise for the controversial field. Rather, it said, with money scarce, it had decided to focus on its experimental cancer therapies, which are further along in development.

“I deeply believe in the promise of stem cells,” John A. Scarlett, the chief executive of Geron, said in an interview. “I don’t think that promise is in any way, shape or form changed by what we’re doing.”

Still, the move is expected to be widely seen as a setback for the field, because of Geron’s central role.

The company, based in Menlo Park, Calif., helped pay for the initial derivation of human embryonic stem cells at the University of Wisconsin in the late 1990s, giving it fundamental patent rights in the field.

Then, in 2010, after a long struggle to win permission from the Food and Drug Administration, it started the first clinical trial of a therapy derived from embryonic stem cells, in spinal cord patients.

California’s state stem cell agency, hoping to spur an early success, had agreed to lend Geron up to $25 million to pay for the trial. Dr. Scarlett said the company had returned $6.5 million, the amount it had borrowed so far, plus interest.

Embryonic stem cells can turn into virtually any type of tissue in the body, so some doctors are hopeful they might one day be used to create replacement cells or tissues to fight a vast array of diseases.

But the field has been controversial because creation of the embryonic cells usually involves the destruction of human embryos.

In the trial, nervous system cells derived from embryonic cells were injected into people with severe spinal cord injury.

So far four patients have been treated. Dr. Scarlett of Geron said that there were “no signs” that the treatment was helping the patients. But that was not expected in the initial trial, which was mainly looking at safety. And so far, he said, there had been no sign of safety problems.

Dr. Scarlett, who took over as chief executive less than two months ago, said that Geron was not divesting itself of the stem cell business because of the trial results. Rather, he said, it needed to conserve resources at a time when it was extremely difficult for small, unprofitable life science companies to raise capital.

By dropping the stem cell program — the company is cutting its work force by 66 people, or 38 percent — Geron will be able to last without needing to raise new money until it receives results of clinical trials of its cancer drugs over the next 18 months. By contrast, Dr. Scarlett said, given all the precautions in the stem cell field, he did not think there would be results from the stem cell trial until 2014.

Dr. Scarlett said that Geron hoped to sell or license the stem cell program to another company that would continue it.

So far, though, many big pharmaceutical and biotechnology companies have been wary about trying to develop therapies using embryonic stem cells because of the political controversies and scientific and economic uncertainties.

Geron’s withdrawal leaves Advanced Cell Technology as the only company now conducting a clinical trial involving human embryonic stem cells.

It has turned the embryonic cells into retinal cells, and these have been implanted into the eyes of two people suffering from two different forms of macular degeneration, a condition that can cause blindness. So far, results have not been reported.

There are many other trials for a variety of diseases using so-called adult stem cells, which are not as controversial.

Dr. Robert Lanza, the chief scientific officer of Advanced Cell Technology, said Geron’s move was “very unfortunate for the field” and “puts the pressure on us now.”

He said that spinal cord injury “was not the ideal first indication for an embryonic stem cell therapy. Everyone knew it was going to be very difficult to show efficacy.”

Another company, StemCells Inc., is sponsoring a clinical trial testing neural stem cells derived from an aborted fetus as a treatment for spinal cord injury.

A version of this article appears in print on November 15, 2011, on page B2 of the New York edition with the headline: Geron Is Shutting Down Its Stem Cell Clinical Trial. Order Reprints|Today's Paper|Subscribe